Want Tailfins With That?

By Dan Becker and James Gerstenzang

Should taxpayers subsidize the sale of 18-mile-per-gallon SUVs?

That is the question at the heart of a still-quiet but heated debate that is likely to flare into full view in Congress in coming weeks. It brings together two issues at the intersection of the toughest policy challenges facing Congress and the Obama administration as they seek to revitalize the economy and fight global warming.

A $3 billion proposal intended to boost auto and light truck sales will be attached to legislation that could emerge by Memorial Day from the House Energy and Commerce Committee as the panel prepares a bill intended to limit greenhouse gas emissions.

There is broad agreement on the idea of using federal money to stimulate sales. But that is where the consensus ends.

One approach, advanced by Rep. Betty Sutton (D-Ohio) and gathering behind-the-scenes support at the urging of Rep. John Dingell (D-Mich.), long a key supporter of the auto industry, would work this way:

Send a gas-guzzling SUV or other light truck--one getting at least 16 miles per gallon--to a scrap heap (to make sure it is permanently removed from the road) and receive $3,000 from the federal government to help defray the cost of buying a new vehicle that, in this case, gets at least 18 miles per gallon.

The 18 mpg threshold is half a mile per gallon below the federal fuel economy standard for trucks.

A competing measure supported by two other Democrats, Reps. Steve Israel of New York and Jay Inslee of Washington, would allow the buyer to replace the gas-guzzler with a new or used vehicle, but it must be one that improves fuel economy over the old vehicle by at least 25%.

The Obama administration has endorsed the idea of paying to get the clunkers off the road, but has quietly put top priority on achieving the maximum economic benefit for automakers.

But, Ann Mesnikoff, director of the Sierra Club's Green Transportation Campaign, wrote in a Sierra Club blog, "The auto industry is doing its best to ensure that the fuel economy veneer on the package is paper thin."

"Automakers already produce a fleet of cars that exceeds the 27.5 mpg standard that has been in place since 1986, so we should ensure our dollars help sell cars that are above that ancient average," she blogged.

Both versions of the "cash for clunkers" plan would use taxpayer money to boost auto sales. The Israel-Inslee bill would push Detroit into producing--and selling--environmentally cleaner cars and trucks.

The question is not whether taxpayer money should be used to help the auto industry. Tens of billions have gone their way and more will follow. The issue is whether that money is used to help the auto industry avoid past mistakes - or repeat them.